The Providence Journal reports that the state of Rhode Island has hired Steven J. Johnson of SJ Advisors to study the potential impact of defaulting on the bonds related to the $75 million 38 Studios loan. Rhode Island lawmakers earmarked $50,000 in the current fiscal budget to study the potential financial impact that might occur if the state defaults on the loan guarantee greenlit by the RI Economic Development Corp. to bondholders who financed the 38 Studios loan deal.

If the amounts covered by reserve funds are left out of the equation, the state potentially owes $89.2 million on Schilling’s state-backed loan, including a $2.5-million taxpayer payment approved by lawmakers to the bondholders on May 1, 2014, and an $12.5 million in each of the next seven years. A previous analysis by Peter Marino from of the Office of Management and Budget concluded that failing to pay these bonds would likely have serious financial consequences for the state, its municipalities and various entities that rely on financing from investors outside Rhode Island.

"Our position is clear," said Richard Licht, director of the Department of Administration. "This is a priority of the governor, of the Office of Management and Budget and the Department of Administration to pay these obligations."

Though lawmakers had lots of reservations and complaints, they approved the initial $2.5-million payment to the investors who purchased the high-yield bonds, but also earmarked funds to get an "independent" analysis of potential effects of a decision to forego the remaining payments.

The money earmarked to analyze what would happen if the state defaulted on the bonds did not seem to generate any interest, so Gov. Chafee's administration started their own search for an analyst, according to Licht.

"We started beating the bushes," Licht told The Providence Journal on Wednesday.

The state also increased the proposed payment amount to $75,000, plus expenses.

The financial analyst chosen to do the work will spend about a month reviewing the 38 Studios financial material before reporting back to Rhode Island officials, Licht said. Johnson will make himself available for General Assembly hearings.